1. FHA loan scenario with large recovery accounts * For example, here is a case scenario: - if the borrower had an outstanding balance on a debt collection account of USD 10,000 on a non-medical account - the lender must use 5% of the $ 10,000 or $ 500 per month as part of the borrower's monthly expenses, this is true even though the borrower does not need to make this payment * The reason the Federal Housing Administration requires this is that in the event that a debt collection agency takes action against the borrowers, the debt collection account may turn into a judgment where the borrower can be pledged and placed on the property as well as the borrower's assets. 2. DTI problems with the FHA loan with large debt collection accounts * Consumers have a higher debt-to-income ratio, problems may arise if they need an FHA loan with large debt collection accounts that are not debt collection accounts. - For non-medical collection accounts with unpaid balances, lenders are required to collect 5% of the outstanding recovery balance and use it to calculate the borrower's debt to income ratio - If your collection account balance is in the tens of thousands of dollars, it may disqualify borrowers due to a higher debt-to-income ratio - FHA DTI requirements allow approval/eligibility for an automatic guarantee scheme up to 46.9% initial debt-to-income ratio and 56.9% debt-to-income ratio for back-end borrowers with at least 620 credit points - For those under 620 creditworthiness, the maximum debt-to-income ratio is limited to 43% when AUS is approved - There is a solution for borrowers looking for a mortgage with large debt collection accounts Read more https://gustancho.com/fha-loan-with-large-collection-accounts * You want to know more, contact The Gustan Cho Team at 262-716-8151 or send a text message for faster response. Or write to us at gcho@loancabin.com. We are available 7 days a week, in the evening, on weekends and holidays. * CHECK IF YOU QUALIFY: www.gustancho.com/fast-quote ***** Follow me ***** on Social Media 1. https://www.facebook.com/TheGustanChoTeam/ 2. https://www.facebook.com/alexcarlucciMortgage/ 3. https://www.instagram.com/gustanchoas... Be sure to subscribe for more: https://www.youtube.com/c/GustanChoAssociates ALEX CARLUCCI - SVP Mortgage Banker, NMLS# 229891 STATE LICENSES: - Alabama - Colorado - 100511536 - Florida - LO40799 - Illinois - 031.0026265 - Indiana - 38913 - Michigan - 229891 - Mississippi - Pennsylvania - 72654 - Tennessee - 200345 ALL-STATE LICENSES: - Alabama - California - Colorado - Florida - Georgia - Illinois - Indiana - Michigan - New Jersey - Pennsylvania - Tennessee - Texas - Ohio All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Loan Cabin, Inc. and GCA does not guarantee the quality, accuracy, completeness, or timeliness of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Loan Cabin, Inc.. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. #mortgage #mortgageloans #mortgageguidelines #homeloan #mortgagerates #bankstatement #jumboloans #qualifyformortgage #fhamortgage #bankruptcy #foreclosure #mortgageapproval #realestate #streamlinerefinance #refinance #repaircredit #badcredit #investemnt #valoans #nonqmloans #lenderoverlays #creditscores #debttoincomeratios #homeinsurance #buyingahouse #homepurchase #mortgageinsurance #housingmarket #mortgagelicense #coloradomortgage #californiamortgage #floridamortgage #texasmortgage #ohiomortgage #pennsylvaniamortgage #illinoismortgage #indianamortgage #michiganmortgage